Loan Calculator: Monthly Payment, Total Interest & Payoff Date

How to use the loan calculator

Enter how much you're borrowing, the interest rate and how long you'll take to repay it. It works for any fixed-rate installment loan: personal loans, car loans, student loans, and home improvement loans. If the lender quotes an APR, use that, because it folds fees into the rate and gives a truer cost. Add an extra monthly payment to see how much sooner you'd be debt-free and how much interest you'd keep.

How the monthly payment is calculated

Fixed-rate loans use the amortization formula:

Payment = P × r ÷ (1 − (1 + r)⁻ⁿ)

P is the amount borrowed, r the monthly rate (APR ÷ 12) and n the number of payments. A $25,000 loan at 8.5% over 5 years comes to about $513 a month and roughly $5,775 of interest in total.

What an extra payment does

Any amount you pay above the required payment goes straight to the balance. Because interest each month is charged on what you still owe, a smaller balance means less interest next month, and the month after. On the example above, adding $100 a month pays the loan off 11 months early and saves about $1,170 of interest. Before paying extra, check that your loan has no prepayment penalty and ask the lender to apply the extra to principal.

Typical loan terms and rates

Personal loans: usually 2–7 years. Rates depend heavily on your credit score, from single digits for excellent credit to over 30% for poor credit.
Car loans: usually 3–7 years. New cars generally get lower rates than used ones. Longer terms lower the payment but can leave you owing more than the car is worth.
Student loans: federal loans have fixed rates set each year and a 10-year standard plan; private loans vary by lender.

Tips for borrowing less expensively

Compare at least three offers using APR, not just the monthly payment.
Choose the shortest term whose payment you can comfortably afford.
Improving your credit score before applying can lower the rate noticeably.
Watch for origination fees, which are often taken out of the amount you receive.

Frequently asked questions

How is a monthly loan payment calculated?

Most loans use a fixed payment that covers that month's interest plus a slice of the balance. The formula is payment = P x r / (1 - (1 + r)^-n), where P is the amount borrowed, r is the monthly interest rate and n is the number of monthly payments.

Do extra payments really make a difference?

Yes. Extra money goes straight to the balance, so every later month charges interest on a smaller amount. Even a small extra payment each month can cut years and a large share of interest from a long loan. Check with your lender that there's no prepayment penalty.

What's the difference between interest rate and APR?

The interest rate is the cost of borrowing the money. APR also includes fees, such as origination fees, spread over the loan, so it's the better number for comparing offers. Use the APR here to include fees in your estimate.

Is a shorter or longer loan term better?

A shorter term means higher payments but much less total interest. A longer term lowers the payment but costs more overall. Pick the shortest term whose payment fits comfortably in your budget.